At an industrial port in Tokyo, Japan, a guy walks in front of containers and cranes. 29th of September, 2017. Toru Hanai/Reuters (Reuters) – TOKYO, July 1 (Reuters) – A central bank survey found that big manufacturers’ business confidence rose to a two-and-a-half-year high in the second quarter, indicating that strong global demand was assisting the economy’s recovery from the coronavirus pandemic’s doldrums. For the first time in five quarters, service-sector mood improved, indicating that the economic recovery was widening even as Japan battled a new wave of coronavirus infections. The Bank of Japan’s (BOJ) “tankan” survey for June indicated that the headline index for big manufacturers’ sentiment increased to plus 14 from plus 5 in March, marking the fourth consecutive quarter of improvement and the highest level since December 2018. “Exports and output are increasing, which is helping to enhance sentiment in most manufacturing sectors. However, due to semiconductor chip shortages, confidence in the auto industry has deteriorated “During a briefing, a BOJ official stated. The mood index for large non-manufacturers rose to plus 1 from -1 in the previous survey, the highest result since March 2020. According to the study, big corporations expect capital spending to climb 9.6 percent in the current fiscal year, ending in March, after falling 8.3 percent the previous year. As a result of state-of-emergency limitations to prevent the spread of COVID-19, Japan’s GDP declined by 3.9 percent on an annualized basis in the first quarter and is expected to grow only moderately in the April-June period. find out more While most restrictions have been relaxed, many analysts believe consumption will continue to be a weak point in Japan’s export-driven recovery as sluggish vaccinations prevent households from spending more on leisure and dining out. The tankan will be one of the issues the BOJ examines at its July 15-16 interest rate review, when it will release new quarterly growth and inflation predictions. The tankan sentiment index is created by subtracting the percentage of respondents who think the situation is bad from those who say it is positive. Optimists outnumber pessimists in a positive reading. Leika Kihara and Tetsushi Kajimoto contributed reporting, and Christopher Cushing edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More